DOING EXACTLY WHAT THEY SAID THEY WOULD DO.

Earlier this month, RBC Capital Markets analyst Walter Spracklin said in a note to clients that CN could experience “growing pains” that could drive up higher operating costs and impact the volume growth on the bottom line.

“CN’s combination of sector-leading volume growth and softer performance metrics for (the third quarter) suggests, in our view, growing pains to absorb growth,” Spracklin wrote.

“This has dampened our expectations for the quarter; however, CN remains one of our preferred names and we believe the network congestion could prove temporary.”

Dan Sherman, an analyst with Edward Jones Investment, said while the market may be slightly disappointed that the company missed consensus results, the company is “doing exactly what they said they would do.”

“They are holding their operating expense ratio at a pretty stable rate, right around 55 per cent, and growing shipment volumes in a major way,” Sherman said.

Last week, CN’s rival Canadian Pacific Railway Ltd. increased its 2017 guidance after another profitable quarter that saw revenues grow three per cent from the same time last year to $1.6 billion.

The company reported a third-quarter record operating margin — an industry measure of railroad efficiency — of 56.7 per cent.

Canadian National’s stock jumped 1.4 per cent on Tuesday before the financial results were released to $104.89. So far this year, the stock is up almost 17 per cent.